Correlation Between Graphic Packaging and FVCBankcorp
Can any of the company-specific risk be diversified away by investing in both Graphic Packaging and FVCBankcorp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Graphic Packaging and FVCBankcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphic Packaging Holding and FVCBankcorp, you can compare the effects of market volatilities on Graphic Packaging and FVCBankcorp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Graphic Packaging with a short position of FVCBankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and FVCBankcorp.
Diversification Opportunities for Graphic Packaging and FVCBankcorp
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graphic and FVCBankcorp is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding and FVCBankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FVCBankcorp and Graphic Packaging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Graphic Packaging Holding are associated (or correlated) with FVCBankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FVCBankcorp has no effect on the direction of Graphic Packaging i.e., Graphic Packaging and FVCBankcorp go up and down completely randomly.
Pair Corralation between Graphic Packaging and FVCBankcorp
Considering the 90-day investment horizon Graphic Packaging Holding is expected to generate 0.39 times more return on investment than FVCBankcorp. However, Graphic Packaging Holding is 2.54 times less risky than FVCBankcorp. It trades about 0.0 of its potential returns per unit of risk. FVCBankcorp is currently generating about -0.14 per unit of risk. If you would invest 2,727 in Graphic Packaging Holding on January 20, 2024 and sell it today you would lose (6.00) from holding Graphic Packaging Holding or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphic Packaging Holding vs. FVCBankcorp
Performance |
| Timeline |
| Graphic Packaging Holding |
| FVCBankcorp |
Graphic Packaging and FVCBankcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphic Packaging and FVCBankcorp
The main advantage of trading using opposite Graphic Packaging and FVCBankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging position performs unexpectedly, FVCBankcorp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FVCBankcorp will offset losses from the drop in FVCBankcorp's long position.| Graphic Packaging vs. Reynolds Consumer Products | Graphic Packaging vs. Ball Corporation | Graphic Packaging vs. Crown Holdings | Graphic Packaging vs. Myers Industries |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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